Occupational exposure to bacterial or fungal antigens has been associated with hypersensivity pneumonitis (HP), an immunologically-mediated pulmonary disease. Between August 1995 and April 1996, 34 employees working in machining and assembly areas of an engine manufacturing plant were clinically diagnosed with HP. Of these, 20 employees met an epidemiologic case definition. In a case-control study, no exposure variables, including duration and intensity of metal working fluid (MWF) exposure, were statistically associated with an increased risk of disease. Neither cases nor controls demonstrated precipitin reactivity against unused samples of the seven MWF and two biocides used in the plant. HP cases had a significantly higher prevalence of positive precipitin reactions to used oil soluble and synthetic MWFs. Reactivity to used but not unused MWF suggests a biocontaminant, probably bacteria or fungi, is the causative antigen in the development of HP in this setting.